Brad DeLong — I would not have called MMT "nonsense economics".

Brad DeLong schools Jonathan Portes.

Grasping Reality
I would not have called MMT "nonsense economics".
Brad DeLong | Professor of Economics, UCAL Berkeley

Jo Mitchell — Misunderstanding M

Jo Mitchell corrects Richard Murphy on what MMT actually says.

Critical Macro Finance
MISUNDERSTANDING MMT
Jo Mitchell | Senior Lecturer, University of the West of England, Bristol

Richard Murphy — The political economy of Labour’s fiscal rule

Good one. Worth reading in full. Richard Murphy gives his summary of the state of the his argument with Jonathan Portes and Simon Wren Lewis.

Tax Research UK
The political economy of Labour’s fiscal rule

Richard Murphy

Chris Dillow — Obstacles to full employment

Is full employment sustainable? For me, this is one question posed by the row between Richard Murphy and Jonathan Portes and Simon Wren-Lewis over Labour’s proposed fiscal rule....

Disappointing for a someone that is sympathetic to Marx, as Chris Dillow identifies himself.

Stumbling and Mumbling
Obstacles to full employment
Chris Dillow | Investors Chronicle

Richard Murphy—A challenge to Simon Wren-Lewis on modern monetary theory and Labour’s fiscal credibility rule

Richard Murphy challenges Simon Wren-Lewis to put up or shut up.

So my question is, I suppose, inevitable. What I would like Simon to do is show how he and Jonathan Portes have written, as he claims, a rule that delivers a real-world political economic solution (because that is what Labour's rule is, because it is not an academic paper) that is the same as modern monetary theory. And I want him to show this even though:

i) The rule he has written works subject to financial constraints, and not the constraints of the physical economy, and

ii) It does so even though it requires a balanced current expenditure budget and modern monetary theory quite specifically does not;

iii) MMT does not set time limits for actions to resolve funding issues and the Portes / Wren-Lewis rule does.

What I would also like to see is Simon's own explanation of why MMT does work, since he accepts it does, and his explanation as to why Jonathan Portes is wrong in that case.

Of course, the explanation can be theoretical, but I should add that this is really about the political economy. This would not matter nearly so much if Labour had not adopted the Portes / Wren-Lewis rule. So the explanation has to work at that political economic level as well: i.e. the power relationships inherent in the two approaches also have to be the same for the challenge to be achieved as that is what political economy is concerned with....

Actual policy is where the rubber hits the road.

Tax Research UK
A challenge to Simon Wren-Lewis on modern monetary theory and Labour’s fiscal credibility rule

Richard Murphy

Richard Murphy — Why the left and Labour really do need to adopt the core ideas of modern monetary theory

Important for those interested in MMT. It is a must-read if British or interested in the UK affairs.

Richard Murphy takes Jonathan Portes (and Simon Wren-Lewis) to task for betraying Labor and the left, while misrepresenting MMT.

The issues that MMT addresses in terms of political economy are social, political and economic, as well as cultural and institutional. A lot of different expertise needs to be brought to bear in addition to theoretical economists. Academic economists don't own this debate. Neither do financial professionals. While both these areas of expertise are required, they are not the only necessary ones. Given the broad context, many inputs are relevant in addition.

One of these areas is the so-called Green New Deal. The issues involved are fundamentally economic but they are also fundamentally social as an existential threat and fundamentally political in that a political solution is required. Moreover, it's a huge engineering problem, since the energy system is involved. It's also a global challenge that in which all will have to cooperate.

Any viable solution will require changing institutional arrangements, e.g., legal requirements, and it will also require a cultural shift that involves mass education, since the low-hanging fruit is conservation in an environment where consumption is promoted. It is a huge undertaking, which is a big reason that it is a hot potato that few are brave enough to pick up — not to mention, smart enough.

What MMT has to offer in particular is the knowledge that the only constraint on currency sovereigns addressing issue of public purpose is availability of real resources. The financial constraint is inflation and inflation is a consequence of resource scarcity relative to demand. Governments can address this by controlling demand through taxation or increasing availability of real resources through public investment. 

This being a finite world there are physical limits. Knowledge is potentially unlimited, however, limited only the ability to tap potential. Ignorance limits potential, and willful ignorance and dissimulation are culpable.

Richard Murphy broaches these issues skillfully. Good job — although I don't agree with everything he says, notably, about the job guarantee.

Tax Research (UK)
Why the left and Labour really do need to adopt the core ideas of modern monetary theory

Richard Murphy

Also

Tax justice and MMT

See also

Labour’s chief economic adviser [James Meadway] confirms it is committed to the thinking that will deliver yet more austerity (6 Aug 2018)

* Demand is the term that economists use to describe the ability and willingness of buyers to purchase a product or service. … 

This general idea of demand is often called notional demand, which is composed of both latent demand and effective demand.

Even if a buyer needs or would be willing to purchase a particular product or service, he cannot do so if he lacks the necessary funds or if he does not know about that product or service. This portion of market demand is called latent demand.

Effective demand is a representation of the actual amount of goods or services that buyers are purchasing in a given market. Effective demand is the difference between notional demand and latent demand. Effective demand is a reflection of the extent to which buyers' income, perceptions and needs combine to result in an actual purchase rather than a mere desire to purchase.

— Ronald Kimmons, What Is the Difference Between Demand and Effective Demand?

Alexander Douglas — The Big Modern Monetary Theory Debate

Philosopher Alexander Douglas on the monetary debate, with particular reference to Jonathan Portes and Simon Wren-Lewis. About economic models and modeling. 

I used to think I agreed with MMT by and large. But when I write things on what I think is wrong with macroeconomic theory, MMTists seem to disagree with me. I think I’m more comfortable with the high levels of abstraction and conceptual shorthand rampant in economic models, even if they’re literally untrue. My problem is with the logical puzzles that emerge even taking the shorthand as read. But never mind; here I’ll just say what I think about the policy debate.

The debate that most interests me is over what Portes and Simon Wren-Lewis have called ‘The Consensus Assignment’. Portes describes it thus in the article linked:

Medium
The Big Modern Monetary Theory Debate

Alexander Douglas | Lecturer in Philosophy, University of St. Andrews

Peter May — MMT as nonsense economics – or not

Richard Murphy has always said that MMT supporters do not properly understand tax and Jonathan Portes seems to me, on the evidence of this article, to fall into the same category.

What Jonathan Portes misses is that the ‘financial constraints’ are self-imposed. It’s bad enough – in reality – being short of teachers, nurses and doctors. But having bogus self imposed financial constraints is just – well – self imposed.
Finance is man made.

Jonathan Portes, as a former Treasury civil servant, seems, regrettably, to suggest that finance should make man....

Progressive Pulse
MMT as nonsense economics – or not

Peter May

Michael Roberts — Capitalism – where Marx was right and wrong

Jonathan Portes is a leading mainstream Keynesian economist. Formerly head of the British economic think-tank, the National Institute of Economic and Social Research, he is now senior fellow and professor of Economics and Public Policy, Kings College, London. Late last year Portes wrote a short book on Capitalism: 50 ideas you really need to know.

Marxian economist Roberts critiques of the misleading portrayal of Marx in Capitalism: 50 ideas you really need to know, correcting the mistakes Portes makes in his reading of Marx that reflects the myths rather than the reality of the text.

Economists' understanding of the "big three" — Adam Smith, Karl Marx, and John Maynard Keynes — is generally low, apparently because they accept the conventional wisdom about them instead of actually reading them. Hey, The Wealth of Nations, Capital, and The General Theory are long.

Michael Roberts Blog
Capitalism – where Marx was right and wrong
Michael Roberts

Bill Mitchell — The on-going crisis has nothing to do with a supposed liquidity trap

The problem is that while there are some leading economists who are arguing against harsh fiscal austerity at present at the basis of their reasoning is a thoroughly mainstream approach which has helped create the problem. I don’t think their version of ECO101 Macroeconomics provides the answers. There is some common ground with Modern Monetary Theory (MMT) but an even deeper incongruence.

Read it at Bill Mitchell — billy blog
The on-going crisis has nothing to do with a supposed liquidity trap

by Bill Mitchell

What does ‘Keynesian’ mean?

What does it mean to be a ‘Keynesian’? This column argues that, like so much in economics, the label has become politicised. The cost is an impoverished policy debate that is resulting in millions of avoidable job cuts.

 Read it at Vox.eu
Fiscal policy: What does ‘Keynesian’ mean?

by Jonathan Portes | Director of the National Institute of Economic and Social Research (UK)

Good summary of some major points.

Some economists are shifting their thinking based on empirical evidence stemming from the global financial crisis.